Major gas deal reached in Israel

After months of stalemate, Israel might be making a step towards the development of the giant offshore gas field, the Leviathan.

It has been announced that an agreement has been reached this week with gas operators Noble Energy and Delek Group. The draft will be presented to the cabinet on Sunday for a vote.

Prime Minister Benjamin Netanyahu feels confident the deal will be a success.: “I am certain that we will pass it by a large majority, and rightly so, and we will move forward with it for the benefit of the Israeli economy and Israel’s citizens.”

According to reports, the arrangement stipulates the firms will commit to invest $1.5 billion in the development of Leviathan over the next two years, and also reduce their respective stakes in the Tamar offshore gas field. The agreement also envisions the ceiling price of gas for sale to Israeli companies will be lower, Reuters reports.

The Leviathan development has been stalled since last year, after the Israeli State Authority declined to give its approval, citing lack of competition, and branding Noble Energy and Delek consortium a monopoly, as they control Israel’s largest gas fields, Tamar and Leviathan.

David Gilo, the Israeli Antitrust Authority’s director in May announced his resignation amid disagreement with the government, saying the government was entering into a deal that would not bring competitiveness into the market.

 

Lower cost of living

 

Netanyahu today said that the arrangement puts the interests of the State of Israel at the center, and will bring Israel’s citizens hundreds of billions of shekels in the coming years.

“This money will serve us in health, education and social welfare,” he said, adding that the gas that will flow to Israel will also lower the cost of living because gas is an energy that is significantly cheaper than others.

“…this will help us lower the cost of living. It costs less to work with gas. Prices will be lower. This is of unparalleled importance. And, of course, this will also help us in developing industry and the periphery and will thereby help to create new jobs, growth, a lower cost of living, employment, energy security, and a cleaner environment – we do not want to pollute the environment. This is cheaper and cleaner energy,” Netanyahu said.

He added: “There is every reason to do this. There is every reason to adopt this outline. We will not get into populism; I said so at the outset. We will extract the gas from the seabed and we will bring it to the State of Israel. I am certain that after every possible inquiry, a majority of Israel’s citizens will be convinced that the outline we have reached is a good outline for the State of Israel.

I will submit this outline to the Cabinet on Sunday. I am certain that we will pass it by a large majority, and rightly so, and we will move forward with it for the benefit of the Israeli economy and Israel’s citizens.”

Offshore Energy Today Staff

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